Income Taxes

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note 7 - Income Taxes

The net deferred tax liability in the accompanying balance sheets includes the following amounts of deferred tax assets and liabilities:

	December 31, 2011			December 31, 2010
Deferred tax Liability	$	-		$	-
Deferred tax asset
Accrued salary		20,910
Net operation losss Carry forward		296,707			66,000
Valuation allowance		(317,617	)		(66,000	)
Net deferred tax asset		-			-
Net deferred tax liability		-			-
	$	-		$	-

The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to utilize all of the net operating loss carryforwards before they will expire through the year 2031.

As of December 31, 2011, the Company has a net operating loss carryforward of $872,669 available to offset future taxable income through December 31, 2031.  The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to utilize all of the net operating loss carryforwards before they will expire through the year 2031.

The net change in valuation allowance for the year ended December 31, 2011 and 2010 was an increase of $251,000 and $23,000, respectively.

The components of income tax expense related to continuing operations are as follows:

	December 31, 2011		December 31, 2010
Federal
Current	$	-	$	-
Deferred		-		-
		-		-
State and Local
Current	$	-	$	-
Deferred		-		-
		-		-

The Company’s income tax expense differed from the statutory rates (federal 34% and state 0%) as follows:

	December 31, 2011			December 31, 2010
Statutory rate applied to earnings before income taxes	$	(305,480	)	$	(23,000	)
Increase(decrease) in income taxes resulting from:
State income taxes		-			-
Change in deferred tax asset valuation allowance		251,617			23,000
Non-deductible expenses		53,863			-
Income Tax expense	$	-		$	-